WTI Crude Oil Technical Analysis – Watch what happens around this key support

Crude Oil prices remained
supported in the past two weeks as the geopolitical risk in the Middle East
stayed high around the Israel-Hamas war and possibility of a larger conflict
comprising other Arab countries, especially Iran. We’ve been seeing a clear
pattern of large rallies into the weekends as the market feared escalations
given the Israel’s intention of a ground offensive in Gaza. Once again, we
haven’t got any ground operation and we have even seen some hostages being
released. This has led to a quick erase of the geopolitical risk premium seen
in the past two weeks. Nevertheless, the Middle East will remain a focal point
for now.

WTI Crude Oil Technical
Analysis – Daily Timeframe

On the daily chart, we can see that Crude Oil found
resistance around the trendline, the red
21 moving average and the
50% Fibonacci retracement level,
but eventually faked out the buyers as the price spiked higher into the 61.8%
Fibonacci retracement level before erasing all the gains of the past two weeks.

The price is now back at the key support around
the $83 level where we can expect the buyers to step in again with a defined
risk below the level to position for another rally into the highs. The sellers,
on the other hand, will want to see a break to the downside to invalidate the
bullish setup and start targeting the lows around the $65 level.

WTI Crude Oil
Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have what
could turn out to be a bear flag if the
price continues lower and breaks below the key support. At the moment, it’s
hard to envision such a scenario given the high geopolitical risk around the
Israel-Hamas war but there’s also global growth to worry about and the recent
data suggest that there’s weakness creeping in slowly.

WTI Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that from
a risk management perspective, the sellers would be better off waiting for the
price to pull back into the trendline where they will also find the confluence with
the red 21 moving average and the Fibonacci retracement levels. A break above
the trendline should invalidate the bearish setup and trigger more bullish bets
from the buyers leading to a rally back to the $88 price area.

Upcoming Events

Tomorrow we will see the latest US Jobless Claims data
with the market likely focusing on the Continuing Claims figures as they’ve
missed expectations two times in a row already and might be a signal that the
labour market is weakening. On Friday, we will get the US PCE report which is
unlikely to change anything for the near-term policy outlook.

This article was written by FL Contributors at www.forexlive.com. Source